James Bullard, chairman of the St. Louis Federal Reserve
Fed, eyes on inflation data. Bullard: "You have to be aggressive and start tapering"
Aggression by the central bank e green light to tapering, in case inflation raises the "worries". St. Louis Federal Reserve Chairman James Bullard in an interview with Cnbc, reveals that the fact that current inflation pressures are transient or structural are at 50%, "so politicians have to be ready".
There Fed is expected to announce next month that it will begin tapering its asset purchase program, to complete the operation by mid-2022. But according to Bullard, faster action would be needed. "I would be in favor of starting the taper in November", he said explaining that he supports "the hypothesis of finishing the taper process by the end of the first quarter of next year, because you need to be able to react to possible upside risks. inflation next year as we try to get out of this pandemic. "
Other Fed officials say they would prefer tapering to end before rate hikes begin. The remarks come on the same day that the International Monetary Fund warned that inflation could persist longer than expected. In doing so, the Fund advised central banks to draw up contingency plans to tighten policy in the event that this happens. Bullard said he was optimistic that the economy will grow strongly this year and next, although in his opinion the prospects for economic growth in the United States are expected to contract.
Overall, sui world stock markets pending the minutes of the Fed meeting, the US inflation data and the start of the quarterly season, a feeling of caution. Traders fear that the surge in energy prices will fuel inflation and may prompt the Fed to reduce its emergency buying program sooner than expected.
The headlights remain focused on the minutes of the Federal Open Market Committee meeting of the US central bank: Investors will be sifting through them for any indication of when the US central bank might begin to curtail its massive bond buying program. To worry then the rise in inflation towed by energy prices, combined with the publication of the results of the major groups: Jp Morgan, Bank of America, Morgan Stanley, Citigroup and Goldman Sachs.
Meanwhile, the tone of the European financial centers improves, together with that of the future USA. Milan recovers parity (+ 0.01%), Paris does better (+ 0.2%) but the best is Frankfurt (+ 0.7%) driven by the leap of Sap (+ 4.6%) after the numbers and comforting forecasts. The entire automotive sector in Europe is doing well, with Stellantis accelerating to + 1.9% in Milan. Purchases reward Nexi (+ 2.4%) and Amplifon (+ 2.3%) at the top of the list. Moncler also did well (+ 1.35%) on a positive day for the sector after the numbers of LVMH (+ 2.18% in Paris).